Benami transaction
mohammed rafiq
(Querist) 15 November 2012
This query is : Resolved
property purchased in the name of elder brother before the benami transaction prohibition act 1988 is valid or not.person having possession of the said property for the last 28 years after the benami transaction,whether as per law he can be evicted from the property or not.
Devajyoti Barman
(Expert) 15 November 2012
Yes, he can still be sued under this Act.
MohammedRaffiq Bijapur
(Expert) 16 November 2012
Yes benami transaction was permissible before coming into force of said act. Recovery of possession will depends on facts and circumstances. If person in possession sets a defence of adverse possession and proves the same then it is difficult to recover possession.
K.K.Ganguly
(Expert) 17 November 2012
Benami transaction which took place before enactment of the Act is valid. It is to examined as to what are the grounds under which his eviction has been sought for, to further advise.
Guest
(Expert) 17 November 2012
The object of the Benami Transaction (Prohibition) Act, 1988 is to vest ownership rights in benamidar as against the real owner. It is not the intention of the Benami Act to protect such person from the creditors who allege diversion of funds by such persons in a fraudulent manner in order to escape their liability to the creditor. Therefore when it is alleged that the diversion of funds (movable property) by defendant No. 1 in favour of the other defendant was fraudulent and illegal section 6 of the Act Protects such a claim from the applicability of section 4; M/s PNB Finance Ltd. v. Shital Prasad Jain, AIR 1991 Del 13.
Where such Act is not applicable, section 53 of the Transfer of Property Act 1882 applies, as the same is intended tto be made applicable on fraudulent transactions. Section 53 clearly specifies, as follows:
"Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee."
"For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.]"
Naturally, benami transaction intends to show some other person as the transferree without consideration, i.e., without making his/her liable to make any payment.
That clearly means, benami transaction was illegal even before enactment of the Benami Transaction (Prohibition) Act.
